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With the following two portfolios and risk-free rate of 4%: Portfolio Expected Rate of Return Beta A 10% 1 C 6% 0.5 Please explain 1)

With the following two portfolios and risk-free rate of 4%:

Portfolio	Expected Rate of Return	Beta
A	10%	1
C	6%	0.5

Please explain 1) how would you take advantage of this arbitrage opportunity by shorting Portfolio C, and 2) how would you take advantage of this arbitrage opportunity by using Portfolios A and C to construct a zero risk portfolio.

Please provide an explanation, as I'd like to better understand the concept! Thank you.

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